Edinburgh has secured the top spot on Colliers’ 2024 UK Hotel Market Index due to its strong performance in both occupancy and average daily room rate during 2023 as well as revpar growth since 2019.
The research from Colliers is compiled from analysis of key performance indicators including land prices, build costs, room occupancy, average daily rate, room occupancy rates, four-year RevPAR trend and active pipeline as a percentage of current supply.
The ratings are then consolidated and ranked to show which markets are desirable locations for investors to acquire an existing hotel or develop a new one. Rankings on the index are affected by factors such as high land and construction costs as well as sluggish hotel market growth.
Trailing Edinburgh is Belfast, retaining its position due to its significant revpar growth, with a compound annual growth rate of almost 11 per cent for the period between 2019 and 2023. In third place is Inverness, supported by the strong appeal of Scottish destinations to visitors which has resulted in solid performance metrics, together with a limited pipeline under construction and favourable build and land costs.
York, Oxford and Manchester follow, with London taking seventh place, down two spots due to a combination of high land prices and limited revpar growth against pre-pandemic levels. Bath dropped down seven places from last year due to lacklustre revpar growth in 2023, reflecting the diminishing staycation market across the UK, with similar domestic-led destinations such as Plymouth, Bournemouth and Brighton also losing positions within the index.
What they said
Marc Finney, head of hotels, resorts and consulting at Colliers said: “The data in our third annual report reveals the ever-evolving nature of the UK hotels market. What has been interesting to note this year has been the shift back to the city break as opposed to the countryside staycations which were popular during the pandemic.”
Yvan Gravier, consultant in Colliers’ Hotels Advisory Services team added: “In 2024, we anticipate that the shift away from staycations will contribute to softening performance in local leisure-dependent markets like Plymouth or Cardiff, while the full return of Asian and particularly Chinese travelers is expected to bolster internationally driven destinations such as York or Belfast. Geopolitical tensions and potential conflicts in regions like the Middle East may pose uncertainties on international tourism, however growth is anticipated from middle-class travellers in Europe and North America as well as affluent consumers in emerging economies like India.”